Monday, December 31, 2007

I lost a Prospect to Prudential (2)

I am angry not because I lost a business. Its due to the way I lost it. It was the unfair comparisons, unethical selling and unfound allegations which I believe is rampant in this industry. Such acts are damaging the professionalism of Financial Planners and image of true planners will remain as a Salesman image to the public. Let me show you what I meant by Unfair Comparison, Unethical Selling and Unfound Allegations

1. Unfair Comparison
The Riders in the Prulink assurance is not free. The premium is taken away from the premium and the eventual amount invested is reduced.

Eg of charges as below:
Female non-smoker, age 31 ($100k Death/PTD/CI)
Death / PTD - $6.17/mth
Critical Illnesses - $8.01/mth
Total - $14.18/mth

When reached 55 yrs old ($100k Death/PTD/CI)
Death / PTD - $40.28/mth
Critical Illnesses - $72.98/mth
Total - $113.26/mth

My Level Term of $100k till age 59 is
$39.10/mth same coverage as above
My $100k Accidental Term plan only cost her $70/yr


2) Unethical Selling
Too many to write about. To point out a few.
a) I conducted a Risk analysis and found client to be of Medium Risk. The agent probably infuse greed into client and make her a high risk profiler to buy everything into China.
b) Past performance does not indicate future returns. The idea of using China Fund profits to pay for a regular premium plan is a bad one.
c) The low allocation rate is not explained properly
Year 1 - 15%
Year 2 to 3 - 50%
Year 4 to 9- 100%
Year 10 onwards - 105%
*My client put in $2,000/yr. Advisory Charges = $3,700 out of $6,000 put in during first 3 yrs
d) My client are advised to put premium payment on yearly basis
* It reduces the effect of Dollar-cost averaging and risk is increased.
* Client can't do anything after the 14 free-look period. She guaranteed lost $1,700 overnight.
e) Client can easily invest her $18,000 and top-up $2,000 a year if her main objective is to save and get a separate Term insurance. The $2,000/yr shouldn't go into another policy.


3) Unfound Allegations
* MAS control the insurance industry strictly. There is no such thing as an Insurance Company not paying claims.
* As long as the person is able to provide the required information and the policy stated it is allowable, then surely this is claimable.
* For the part of NTUC Income, such allegations are rampant because
a) Previous Motor Insurance claims experiences spread to the Life Insurances. Other insurers no such problem.
b) Average Education and Income Level of many Income Policyholders are probably lower than other companies. Hence lack of understand causes misunderstandings.
c) Income agents used to be largely formed by part-timers, lack of proper explanation in the past may be one of the factor.

Saturday, December 29, 2007

I lost a prospect to Prudential (1)

I lost a case to Prudential because of an ignorant consumer and a typical unethical adviser last week. Something which I cannot believe that it could happen.

Customer have $20,000
Prudential agent recommend
1) $18,000 to be invested into China
2) $2,000 yearly into China via a regular premium Prulink Assurance Plan.
3) Many funny riders added into the Prulink plan consisting of C.I, Death, accident, Hospital Benefit, etc.
4) Prudential Shield Plan

I recommended
1) $10,000 into a global diversified fund, $5,000 into a Asian Equity Fund, $5,000 into a money market fund
2) A regular investment plan into a 70%/30% Equity/Bonds Global portfolio at $150 monthly after conducting a risk profile analysis
3) Term plan specifically targeting Death/PTD/Critical Illnesses
4) Another separate Shield Plan + Personal Accident Plan on standalone basis

I met up with her and she told me about the Prudential proposal. I spent nearly 2 hours explaining to her the charges of Prulink which her agent did not even tell her and nearly 2 hours explaining my proposal.

She recently told me that she had taken up the Prudential proposal after consideration because
1) My investment recommendation get lower returns than her China Fund
2) The agent says that the returns from her China fund will pay off her $2,000 Prulink Premium
3) My Investment plan no insurance cover and I make her buy a separate Term policy
4) My total premium payable is higher than the Prulink because of my term policy
5) The agent told her that NTUC Income insurance cannot buy because hard to claim
6) I proposed 5 policies whereas the Prudential only recommend 3

I really bang the wall when I realised that I lost to the Prudential Agent despite the high charges charged by them and they not disclosing it. I spent one hour over the phone convincing her that she will hold on a big lemon for many years to come and that the agent is not honest with her. I did not stop her on the $18,000 investment into China but I told her that if she trust me, she better stop the $2,000 Prulink plan within the free-look period. (btw, the agent is smart enough to make her pay $2,000 on yearly basis and not monthly basis)
She feel that I'm bad-mouthing the agent and say that her returns from the $18k China fund will help pay off the $2k anyway.

In my next article, I will write why I'm so angry...

Tuesday, December 25, 2007

White Christmas - Silent night, Holy night

Origin of Christmas

Christmas is a Christian holiday on December 25 that commemorates the birth of Jesus borned to the Virgin Mary. The date of the celebration is traditional, and is not considered to be his actual date of birth.

Christmas literally means the Mass (celebration) of Christ. "Christ" is a Greek word and title, meaning "anointed" or one set apart by God for a special purpose. "Christ" is equivalent to the Hebrew word "Messiah." Based on the words of ancient prophets, the first century Jewish people expected the arrival of the Messiah promised by God as a great deliver of the people.

While we most often think about Christmas as a single day, it is actually a season of the year. In its popular sense, it extends four weeks before Christmas Day and for 12 days after. The time before Christmas is called Advent, comprising four Sundays before Christmas Day. The term "Advent" means "coming" and is a season of expectation and hope as well as the time of waiting for the coming of the Messiah that is celebrated at Christmas.

The 12 days after Christmas, 6th Jan, is called Epiphany. It is a Christian feast intended to celebrate the "shining forth" or revelation of God to mankind in human form, in the person of Jesus. The feast is also called Twelfth Day, or Three Kings Day.

Hence the entire season of Advent, Christmas, and Epiphany can be seen together because they each have distinctly different roles in the Church year.

Meaning of Christmas?

Christmas is a fulfilment of an anticipation and prophecy about the arrival of a saviour. Its about renewed hope and confidences for the people. His birth brought great joy to the world. Shepherds, wise men, and angels all shared in the excitement of knowing about this great event. The people had waited for hundred of years for this to happen.
They knew this was no ordinary baby. The prophets had told of His coming hundreds of years before. The star stopped over Bethlehem just to mark the way for those who were looking for this special child.

Monday, December 24, 2007

Revised Minimum Bid Sizes

You would have noticed that the minimum bid size was revised if you had traded a security above $3.00 in STI today. This was announced on 19th Sep 07 and commenced on 24th Dec 07.

Security Below $1.00 - Minimum bid size = $0.005 (No Change)
Security between $1 to $2.99 - Minimum bid size = $0.01 (No Change)
Security between $3 to $9.99 - Minimum bid size = $0.01 (Reduced from upto $0.05)
Security Above $10 - Minimum bid size = $0.02 (Reduced from $0.10)

In my view,

1) This can improved liquidity. If you have DBS shares at $20, you can sell at $20.04 instead of waiting for a buyer at $20.10.
2) No good for speculators. If you have 10 lots of Cosco at $6.00 ($60,000), the next bid to sell is $6.05 ($60,500), just one bid change, you can make a profit of $500. Now, one bid change is only $0.01 ($60,100)
3) Such change is good for brokers and SGX as more trades are expected to be done. May not necessary be good for retail investors. Share price movement is smaller, hence profitability from trading may be reduced.

Friday, December 21, 2007

Hari Raya Haji / Hari Raya Aidil Adha

Before posting this article, I have no idea what Haji is about. I like to share this new knowledge with you.


Hari Raya Haji (Aidil Adha) falls on the 10th day, 12th month under the Muslim calendar.

On this day, also known as the Festival of Sacrifice, Muslims worldwide sacrifice sheep, cows or camels for the sake of religion and community. It is done in remembrance of the sacrifice undertaken by Prophet Ibrahim to sacrifice his son, Ismail, where, at the last moment, a ram appeared in his place.

Hari Raya Haji also marks the end of the pilgrimage to the holy city of Mecca in Saudi Arabia. Muslims gather in Mecca to perform the pilgrimage, which is the fifth pillar of Islam.

Male volunteers at mosques or Muslim institutions usually perform the sacrificial slaughtering after the Hari Raya Haji congregational prayers. This sacrificial slaughtering, also known as korban, is a voluntary act.

Sheep, goats and cows are ritually slaughtered as sacrifice. The meat is then distributed to the community, neighbours, and relatives with special attention to the needy and poor, as a reminder to share one's wealth with others.

During the sacrifice, prayers are uttered and the sheep's throat is slit with razor sharp knives. This act must be done with confidence and quickly, so as to minimise hurt and mishandling to the animal.

This is in accordance with the Islamic law where halal does not literally mean that the food neither contains pork nor lard, but it has to be slaughtered according to proper Islamic rights.

Do not be confused between Hari Raya Haji with Hari Raya Puasa. Hari Raya Puasa, which falls on the 1st Day, 10th Month of the Muslim calendar, marks the end of Ramadan, the month of fasting. It is a day of victory for Muslims, having successfully completed the fast.

Data extracted from

Wednesday, December 19, 2007

Dining Experience at Lawry's

I went Lawry's The Prime Ribs Singapore at Paragon for lunch today. Heard about the Victorian Style ambience and the famous steak served from Cart. Decided to try it out today.

It was 1:30pm, we were guided to a waiting area as the lunch crowd is still there. Not bad? Still full house for a Tuesday afternoon. After a 10 minutes wait, we were guided into the dining hall. The uniform of the waitress is interesting. Looks like a French maid's uniform. I particularly like the big ribbon behind them. I looked around the hall as I was guided to my seat. The ambience was fantastic, I thought I had travelled back in time to the late 1800s

We ordered 2 set lunches. The California Cut and the Range Trio Combo. Let me have my food review.

1) First come the bread.
* Not bad, the bread are warm and soft enough
* The butter was not well presented. 2 very small piece of butter in such a big plate.

2) Next came the Spinning Bowl Salad.
The Waitress mumbled something and then spin the salad bowl on ice as she pour the salad dressing into the bowl and stir.
* Quite interesting. Something different. But the salad was very normal. Looks like Thousand Island Dressing and Lettuces I bought from NTUC Fairprice.
* I strongly believe I can make better salad than them.

3) Next come main course - The Range Trio Combo.
* The presentation is ok

* I feel that the chicken was a bit too dry and hard to swallow.
* The lamb was fried beyond taste to know that it is lamb.
* The Tenderloin saved the dish. It was real juicy to my standard.
* I pretty like the mango orange sauce for my chicken. The Cheese Risoni goes quite well with it.

4) The California Cut
* The chef pushes a giant cart to our table and ask how we want the steak to be.
* He slides a piece of steak onto the plate and serve it with Mashed potatoes
* Quite boring presentation on the plate.

* Asked for Medium but turn out to be more Medium rare
* California cut is quite small to me but just nice for a lady.
* I tried the steak. It is tender and very juicy.

5) The Yorkshire Pudding
* Taste a bit like the centre part of the egg-tart with croissant. I pretty love it.

6) Desserts - Wild Berry Cheesecake with Vanilla Ice-cream
* You know I'm a cheesecake lover. I simply love this cheesecake. It came with 4 layers. The base crumbs, the cheese, the cake and the thick berry cream. It goes very well with the ice-cream too.

* If I'm going to open a cheesecake shop, I must make it to this standard.

Ok... Ok... Come to the Bill. Its $157 dollars for 2 set lunches with beverage. Wow!!! Heartache!!! We left at 3:30pm after our tea. Don't think will want to come back myself for a meal here. To bring a client to impress them. Still okay.

Ambience - 8
Food - 7
Service - 7
Value - 5

Tuesday, December 18, 2007

The 7 "No" after a meal

1) Eat Fruits immediately after a meal
* It will bloat your stomach. Have them 1 or 2 hours before your meal.
2) Drink Tea after a meal
* Tea leaves contain acid which will make digestion difficult
3) Loosen Belt after eating
* May cause Intestinal problem
4) Bath after eating
* Increase blood flow to other parts of the stomach and affect digestive system around stomach
5) Walk after a meal
* Disrupt the nutrients to be absorbed into our body
6) Smoke after a meal
* The effect will be more distructive compared to smoking before you eat
7) Sleep immediately after a meal
* Cannot digest properly and will cause gastro-intestinal problems

Saturday, December 15, 2007

Immediate Gain from SRS Investment

From my previous posting about SRS, I mentioned that you can get an immediate profit from your SRS investment. Why do I say that?

First let me show you the tax savings if you put $11,475 into SRS:

If you are in the
a) 20% tax bracket - $2,295.00
b) 17% tax bracket - $1,950.75
c) 14% tax bracket - $1,606.50
d) 8.5% tax bracket - $975.38
e) 5.5% tax bracket - $631.13
f) 3.5% tax bracket - $401.63

Presuming a average tax payor is at 8.5% tax bracket, the tax savings will be ~$975 next year. If this person contribute to SRS and invest $11,475, he will pay $975 lesser in tax next year. Effectively, he only uses $10,500($11,475 - $975) for investment.

In another word, he had only used $10,500 in exchange for a asset of $11,475 in SRS investments.

Hence, his immediate gain from SRS investment = $975 / 10,500 = 9.3%
Your Immediate Investment gain for the following tax brackets are:
a) 20% tax bracket - 25% gain
b) 17% tax bracket - 20.5% gain
c) 14% tax bracket - 16.3% gain
d) 8.5% tax bracket - 9.3% gain
e) 5.5% tax bracket - 5.8% gain
f) 3.5% tax bracket - 3.6% gain

Guys! What are you waiting for!!! If you are currently savings for retirement, why not do it through the SRS way? You have until end of the year to open and contribute to SRS.

Thursday, December 13, 2007

My Yearly Mailing Exercise

This is my yearly mailing exercise. Just completed this morning.

This year, I'm mailing out 750 year end greeting cards, 110 Table Calendars and 10 dairies
My purpose is to thank all my policyholders and friends who had supported and trusted me in this business over the past 5 years.

I had spent one full week, day and night, writing the letter, printing names and addresses and the manual work of slotting the cards one by one with the stamp.

I put them into boxes, transported them to the nearest post-box. Passerbys looked at me curiously as I fill up the post box.

My naughty rabbit, seeing something new jumped onto the box and walked around the cards. Don't worry. The cards are not contaminated...

Last but not least, I like to thank all my friends and policyholders again. You are all very important to me. Without you, I'll not have survive this industry. I sincerely wish all of you and your family a very Merry Christmas and a blessed 2008.

Wednesday, December 12, 2007

SRS - Supplementary Retirement Scheme

What is it?
The Supplementary Retirement Scheme (SRS) was established on 1st April 2001 to encourage individuals to save for their retirement by offering tax incentives.

Who is eligible?
* Singaporeans, Singapore PRs and foreigners 21 years and above
* Not a bankrupt or of unsound mind
* Has an earned income in the preceding year
* Passive incomes such as interest, dividend or rental are not eligible

What are the Benefits?
* Your contribution to the SRS will be granted Tax Relief against your Income for that year of assessment.
* Only 50% of your SRS savings taxable when withdrawn on retirement.
* Withdrawals may be staggered over 10 years to avoid the minimum ceiling for tax.

What are the minus points?
* Full amount taxed if withdrawn before the statutory retirement age.
* Further penalty at 5% will be imposed.

How much can you contribute in 2007?
$11,475 for Singaporeans and SPRs
$26,775 for Foreigners

Where can I start my SRS account?
* Open up an account with our 3 local banks. DBS, UOB and OCBC
* Internal Transfer your funds or write a cheque to your own name and SRS account

Is there any charges for opening or maintaining an account?
* Currently "No"

What can I do with the SRS monies?
* You can keep in the account, invest it or get an endowment plan from a Local Insurance Company.
In my next posting, I'll write about how you will get a guaranteed profit from your SRS in your investments.

Monday, December 10, 2007

Insurance Agent = A dying job???

I had heard the above comment since I joined the industry 5 years ago. Is it true that Insurance Agent is a dying job? Over the past years,

1) I had seen many of my peers
* left the industry for good.
* part-timing on MLM and housing agent.
* struggling with their sales and family life due to unstable income

2) Agents image are getting from bad to worse
* The public view us like pest, shoo-ing us away like cockroaches
* Thet get rid of us by saying "I have all the policies already"

3) The Customers are getting demanding
* They wants 100% of our time, no matter how small a policy they bought from us.
* They ask for discount and gifts when they get a policy

4) Commisssion are getting lower due to competition. Recruitment are even harder.

* Lower Commission due to competition and diminishing Image are the 2 factors that make recruitment difficult
Sounds like its true that Insurance Agent is a dying job. Isn't it? Why is Adrian Khiat still in this industry waiting for the death sentence? A graduate with 2 distinctions and prize winner for excellent academic results. Can't he get a better job and start paying tax to the government?

I agree that Insurance Agent is a dying job, but a Financial Planner is not!

Insurance Agent sell an insurance policy without a system in place
Financial Planner adopts the 6 steps Financial Planning Process unlike an agent
1) Establishing and defining the client-planner relationship
2) Gathering client data, including goals
3) Analyzing and evaluating your financial status
4) Developing and presenting financial planning recommendations and/or alternatives
5) Implementing the financial planning recommendations
6) Monitoring the financial planning recommendations

The tarnished Insurance Agent image are spoiling the whole industry, people are not willing to understand what they have and give more respect to a Financial Planner.

A true Financial Planner is like a social worker who sit long hours listening, crack their head to come out with a solution for a problem that a client have. However, the trend is that many Insurance agent is rewarded better than a Financial Planner as a sales is still the end result needed for a Financial Planner to be paid.

The compensation system should be changed. A financial planner should be paid for the time taken to monitor a client's financial plan to ensure that it is on track.

Yes. There are paid financial planners in Singapore. But it forms a very small percentage because Singaporeans generally only wants to get free advice.

Thursday, December 6, 2007

Investment or Inflation???

Just checked that the interest rate for Singapore Fixed Deposit to be 0.825% and 0.500% for Savings account. How pathetic. Didn't we read that the inflation to be 5% next year? You'll lose 4.5% if you continue to keep all your money in your savings account.

So what can you do? Let me share with you the types of investments

From Lowest Risk to Highest Risk

1) Savings account with highest interest rate.
There are always promotions but my favourite is still the Standard Chartered esavers account.
Interest Rate = 1.2%-1.9% daily rated.

2) Singapore SGS Bonds.
Check out with SGS. Can buy via Fundsupermart.
Yield around = 1.2-3.1% depending on years to Maturity.

3) Money Market or Cash Fund
Check out with NTUC Income, Lion Capital or Fundsupermart. They are basically short-term bonds with duration as short as 2 years. Very low risk investment.
Expected Returns = 2-3%.

4) Bonds Unit Trust
Diversify between local and Global Bonds
High Yield Bonds from Emerging Countries gives higher returns with higher risk
If US interest Rate is to go down, Bond yield may goes up and may affect the bond prices too
Projected Returns = 3-4% p.a

5) Endowment Policies
Give the money to Insurance companies. They invest for you and you get some amount of guaranteed returns. There are insurance component also.
Projected Returns = 4-4.5% p.a locked in over 5 to 10 yrs.

6) Foreign Currency Fixed Deposit
For as low as $10,000, you can convert your money into Foreign Currencies and earn a higher interest. Some currencies such as AZ Dollars is able to fetch 6.75% p.a interest. However, currency risk applies. If AZ weakens against S$, then you may lose some. Some transaction fees applies.
Projected Returns = Negative to even 10% p.a depending on currency movement

7) Equties Unit Trust
75% Global Diversified; 25% Theme, country Specific is recommended
Projected returns - volatility expected but can expect around 6-8%p.a over a period of 10 yrs.

8) Shares
Some people had made a fortune with Shares. Recent volatility had indeed scare many away.
Projected Returns - Can lose all your money in extreme events but can gain several hundred percent if you pick the right penny stocks over long term.

9) Warrants and Deviratives
You enjoy the gearing and leveraging effect from these investment instruments for higher returns than shares. However, it is more volatile than shares.
Projected Returns - Can lose everything, but can gain upto 50% in a few days

10) Property
You got money, can try punting the property market. Some people are already laughing their way to the bank. But if you cannot finance, then you'll be in trouble.

11) Ponzi Investments
Argue with one of my clients recently as he invested into Sunshine empire which he claims guarantees 100% returns in around 14 months. Some of my friends tell me to put money into Swiss Cash. Anyway, these are likely ponzi investment scheme. Better avoid.

12) 4D, Toto and Casino
Either you win big time or lose everything. Returns within minutes!!!

The list is not exhausive. These are simply some investment plans for simple man like you and me.

Monday, December 3, 2007

Whats in the INFLATION figure?

INFLATION could hit 5 per cent in the first quarter of next year. This would be a 25-year historic high. Inflation is defined as the general price increase in the economy.

In Singapore, the measure of inflation is the annual change in the Consumer Price Index (CPI). It is based on a fixed basket of goods and services consumed by majority of household in Singapore.

There are seven broad categories of Goods and Services in the CPI Basket. Following are their weightages:

1. Food - 23%
2. Housing - 21%
3. Transport and Communication - 22%
4. Clothing and footwear - 4%
5. Healthcare - 5%
6. Education - 8%
7. Miscellaneous - 17%

Inflation this time round are caused mainly by the higher food prices such as eggs and dairy, live animals and vegetables. Food forms the largest chunk of the CPI. The higher cost of transportation due to higher oil prices and higher housing rental due to strong demand also pushes the CPI upwards.

Guys. If you still think that putting your money in the bank is the safest way to keep you money? Think carefully. I shall share some investment ideas with you in my next posting.